By Nate Wolf

Strategy is getting its balance sheet in order as cryptocurrency prices struggle to get back to their 2025 highs.

Strategy, the world's largest corporate holder of Bitcoin, paused its crypto purchases last week, opting instead to finalize the repurchase of $1.5 billion in convertible bonds due 2029. The company completed the buyback at a roughly 8% discount to par, using $1.38 billion in cash reserves.

Shares of Strategy jumped 3.3% Tuesday even as the price of Bitcoin was flat at around $77,100.

Strategy's business model involves issuing debt and equity to buy Bitcoin and grow its crypto holdings per share. This model has faltered since Bitcoin prices fell from an all-time high of more than $126,000 last October. Strategy stock has declined 56% in the last 12 months, and the company reported a $14.5 billion unrealized loss on its crypto holdings last quarter.

Critics of this so-called digital asset treasury playbook have feared that Strategy and its copycats won't be able to pay their debt or dividend obligations unless Bitcoin prices recover. The debt buyback may ease some of those worries for Strategy in the short term.

"The repurchase of the 2029 converts is both equity and credit positive for our investors and demonstrates our continued focus on liability management," said Chief Financial Officer Andrew Kang in a statement. "Strategy remains committed to maintaining a robust cash reserve to support the credit quality of our Digital Credit securities."

In addition to common stock, the company issues four publicly traded preferred-stock instruments to help fund its Bitcoin purchases.

"Rather than relying on convertible debt instruments that introduce maturity walls and refinancing risk, Strategy is focused on funding bitcoin accumulation through perpetual preferreds that have no maturity date and can therefore function as permanent capital," Mark Palmer, a longtime crypto bull and analyst at Benchmark Equity Research, wrote in a research note Tuesday.

Strategy now holds 843,738 Bitcoin bought at an average price of around $75,700 per coin. The company holds $871 million in cash reserves and plans to replenish this balance over time, the company said Tuesday.

Write to Nate Wolf at nate.wolf@barrons.com

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May 26, 2026 10:12 ET (14:12 GMT)

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